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The number of European bolt-on acquisitions – assets added to existing private equity investments – fell to a six-year low in 2009 despite expectations that firms would adopt the strategy.

The volume of bolt-ons in Europe fell by 41% to 203 last year, according to annual research by data provider Mergermarket and UK buyout firm Silverfleet Capital. This represented the lowest figure since 2004, when firms carried out 169 bolt-ons.

Bolt-ons – or buy-and-builds – slowed from 2008 when the collapse of Lehman Brothers led to debt markets drying up. That year, they amounted to 486. The total value of buy-and-builds dropped to just over £3bn (€3.4bn), the lowest since 2003 when firms agreed £1.7bn of deals. At the top of the market, in 2007, bolt-ons reached £23.4bn.

The number of bolt-ons as a proportion of all buyouts also fell slightly, from 35.9% in 2008 to 33.2% last year.

Neil MacDougall, managing partner of Silverfleet, said such a dramatic drop in activity had come as a surprise and cited differences in vendor and buyer price expectations as one of the biggest reasons for the lack of deals.

He added: “Those companies in a position to do follow-ons were a small minority of private equity portfolios last year. Most companies were probably in a position where they were anxious about the outlook for their own businesses, never mind wanting to do bolt-ons as well.”

He also said bank financing remained difficult, with banks reluctant to provide more debt to businesses which had borrowed large amounts – about six times earnings before interest, tax, depreciation and amortisation – during the boom years.

He said normal leverage levels in the UK mid-market had dropped to about three times and banks would instead expect private equity firms to use more equity for deals.